07 March 2015, London — The Texas-based Anadarko Petroleum Corporation has announced an increase in the estimated recoverable resources in Mozambique’s Offshore Area 1 to more than 75 trillion cubic feet of natural gas. Previously, the company had estimated that Area 1 held between 50 and 70 trillion cubic feet.
Anadarko is the operator in Area 1, located in the Rovuma Basin in the northern province of Cabo Delgado. Its first discovery was in 2010 and it is now working to develop one of the world’s largest liquefied natural gas (LNG) projects. This would enable the gas to be shipped to markets, particularly in the Middle and Far East.
The company is working with its partners to develop the marketing wing of the project, named Mozambique LNG. So far, the project has entered into long-term, non-binding Heads of Agreements covering eight million tonnes of LNG per annum. This covers eighty per cent of the initial supply as Mozambique LNG will begin by building two LNG trains, producing ten million tonnes of LNG per annum (a LNG train is the plant for the liquefaction and purification of the gas, greatly reducing the volume for shipping).
It has been estimated by some that the first train could be operational by in 2019.
However, other analysts such as the London-based analysts Business Monitor International (BMI) do not expect the onshore LNG plant at Afungi, near the northern town of Palma, to begin operations before 2021.
According to Anadarko’s director of external communications, John Christiansen, Anadarko is working with the Mozambican government to achieve the final investment decision as quickly as possible.
Christiansen told AIM that “we have made extraordinarily good progress on marketing, construction, field delineation, and project financing to move the project forward”.
In December, the Mozambican government adopted regulations by decree that set out the legal and financial framework for the development of the Rovuma LNG projects. This guarantees lengthy periods in which taxes rates will not be raised nor the basic legal framework changed.
Commenting on this development, Christiansen stated, “we were pleased to see a Decree Law at the end of 2014; this new legislation marks a critical step toward establishing a project-wide legal and contractual framework that delivers a level of fiscal stability that enables continued investment”.
Anadarko holds a 26.5 per cent stake in Area 1. The other members of the consortium are Mitsui of Japan (20 per cent), ONGC Videsh (16 per cent), Oil India (four per cent), BPRL Ventures (ten per cent) and PTT of Thailand (8.5 per cent). In addition, Mozambique’s National Hydrocarbon Company, ENH, holds a 15 per cent stake.
*AIM
